Australia: Control Of A Workplace For Construction And Maintenance Purposes

The decision of the Australian Industrial Relations Commission in Telstra v Comcare [2007] AIRC 136 should ring alarm bells in the ears of those involved in Commonwealth construction and maintenance contracts.

This case involved an injury to Mr X, whose hand was caught in a pulley system which severed three of his fingers. The pulley system was attached to an air-conditioning unit and at the time of the injury, Mr X was involved in cleaning the plant room associated with that air-conditioning unit. The parties admitted that the injury occurred because of inadequate guarding – which was subsequently rectified.

Mr X was an employee of Trilogy, which was a subcontractor to a joint venture (the "Contractor"). The Contractor was engaged by Telstra Corporation Limited to provide facilities management services pursuant to a Facilities Management Agreement.

This case grappled with the meaning of "control" of a workplace for construction and maintenance purposes. Notwithstanding that it was clear from the terms of the contract that the parties intended that the Contractor would be responsible for occupational health and safety issues, the Commission found that the operation of the Occupational Health and Safety (Commonwealth Employees) Act 1991(Cth) vested that responsibility in the hands of the principal (Telstra).

The Act applies to "employers" and "employees":

"employers" include the Commonwealth and Commonwealth authorities (section 5)

Telstra was found to be a Commonwealth authority and accordingly, was an "employer" under the Act. Its employees were also "employees" for the purposes of the Act. The employees of the Contractor and the subcontractor (including Mr X) however were not "employees" under the Act.

The two key positive obligations under the Act may be found in sections 16 and 68. Section 16 deals with employers’ obligations to protect the health and safety of employees, and section 68 requires employers to notify Comcare of any accidents or dangerous occurrences.

A crucial negative stipulation is found in section 14 of the Act, which removes the operation of the Act from workplaces which are "controlled" by a contractor for construction or maintenance purposes. A unique feature of this case was that the workplace in question was generally unmanned and the Contractor was granted a limited right of access to carry out maintenance works as required from time to time. Thus, the Contractor was carrying out works at the workplace on an intermittent basis.

This made it possible to assess which party was in "control" of the workplace by looking at the parties’ obligations as they existed either:

over the whole term of the contract (ie. for both the period when the Contractor was on and off the workplace); or

merely when the Contractor was on the workplace and engaged in providing the maintenance services.

The Commission made its decision by considering the term of the contract as a whole. In the Commission’s opinion, the fact that the Contractor was providing the services on an intermittent or ad hoc basis necessitated that Telstra was the party in control of the workplace and as such, was bound to comply with the provisions of the Act. Telstra failed to comply with these obligations and accordingly, the Commission found that Comcare was right to bring a claim against Telstra.

This case (which was appealed by Telstra and dismissed by the Full Bench of the Australian Industrial Relations Commission) has potentially wide-reaching implications for Commonwealth construction and maintenance contracts. Notwithstanding an agreed allocation of occupational health and safety risk, the Act may operate to alter that risk allocation.

It may be argued that rather than ascertaining control of the Site by considering the entire term of the contract, the Commission should have looked to the circumstances as they existed when the Contractor was engaged at the workplace to perform the maintenance services and the actual incident occurred. In this scenario, it is possible that the Commission may have found that the Contractor (rather than Telstra) had ultimate control over the workplace -as would appear to have been intended by the terms of the contract.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

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